THE PRICE OF ONLINE PAYMENT

The final frontier, at least for now, where online interaction and privacy may or may not find practical synergy is mobile payment. Predictably, the convenience and cost-saving possibilities are prompting serious discussion as well as intense debate. For anyone late to this party, there is already technology being implemented that enables consumers to make credit card transactions on their smartphones.

Advocates for this progressive capability claim it’s simply the next logical step toward increased consumer freedom. Many of us already conduct business online, whether it involves purchases at Amazon.com or maintaining a Netflix account—just to mention two of the more prevalent options. And just as digital files have made compact discs more archaic and e-Readers threaten to supplant paperbacks, online banking accounts have made the act of writing a check antiquated. All of these advancements incorporate convenience and reduced costs. The caveat is that the final costs might not be measured in dollars and cents.

A simple Google search will quickly reveal plentiful stories exemplifying how easily technical glitches can expose credit card information, and how simple it is for sophisticated hackers to infiltrate the typical firewalls. We will be hearing—and seeing—a great deal more about the viability, and potential repercussions, of online mobile payment. Once again consumers are obliged to ask themselves what types of exposure they might tolerate for the sake of expediency.

Almost three-fourths (74%) of online adults are concerned or very concerned about the security of any financial transactions they may conduct online. This level of trepidation extends to all age groups and income brackets: across the board at least 70% of respondents indicated a high level of concern regarding the prospect of purchases or banking online.

Every day new articles appear attempting to negotiate the increasingly complex matrix of potential pros and cons. The early adopters represent one end of the spectrum while the unconvinced and skeptical characterize the other. But what about the majority of us, who fall somewhere in between these two extremes? And how many people will be influenced as more anecdotes (the good, the bad and especially the ugly) become publicized?

Between growing awareness of how—and how much—personal data is collected and utilized, with Facebook’s awkward PR spectacle this summer being the first firestorm and the expected onslaught of consumer pushback, a groundswell demanding accountability is inevitable. A more transparent explication of policies and SOPs will be a welcome, if overdue development. It also seems safe to suppose, not unlike the recent environmental or auto-safety incidents (BP and Toyota), it will require some sort of calamity to get the public’s attention, finally compelling pro-active accountability from the companies.

IS LEGISLATION INEVITABLE?

It is not exactly a stretch to see where some of these open issues are headed, and how they may ultimately be resolved. The question for now is: is legislation necessary and how effective can it possibly be? Certainly, if companies are slow or reluctant to fully disclose their business practices as they relate to data capture, there will be a concerted push to create and enact new laws.

This will make businesses bristle, but it should also make consumers wary. With general sentiment toward government at a nadir, the prospect of entrusting politicians to wrangle with these issues is not exactly consoling. And then there is the proposition of a clichéd “Big Brother” in charge of overseeing this bounty of personal detail. Put bluntly, the one thing some Americans may fear more than unregulated corporations is a feckless government with good intentions.

As usual, one way to troubleshoot the possibility of a legislative imbroglio is to review where we are and how we arrived here. Considering the regrettable fact that few people inside the corporate bubble fully grasp the nuances of Internet technology, it is unrealistic to imagine many (if any) of our politicians having an adequate handle on how things work—much less being able to cultivate a balance between the entrepreneurial spirit and consumer rights. On the other hand, the Internet—in its myriad manifestations—is a massive component of the U.S. economy. As such, it behooves tech firms to view these challenges as a potential opportunity to engage and foster a meaningful dialogue.

According to Mike Shields, a Republican political strategist with almost two decades of experience inside (and outside) the Nation’s Capitol, the people most affected by policy (e.g., the tech firms) have been very slow to recognize how powerful and important Washington, D.C. is. In other words, despite the caricature of an incompetent, money-spending monolith, the not-so-simple reality is that all these moving parts making our laws are empowered by actual people responding to what they see and hear from other people (e.g., voters).

“Having spent a good amount of time in and around Redmond, I know there was a bit of a disconnect,” Shields says. “There was a propensity to regard D.C. as archaic, and that the tech companies were too busy creating the future to get involved in any meaningful way with government.” Inevitably many companies discovered, too late and to their chagrin, that government really does matter. “Now people are coming to realize that they need a presence,” Shields suggests. “But a big roadblock remains trying to explain (to politicians or laypersons) how some of this technology really works in the first place.” Whether through outreach or pro-active lobbying efforts, tech firms will only be assisting their causes by connecting on a more human level. “What can happen,” Shields warns, “is that a simple law, especially one brought about due to a situation that resonates emotionally, can derail an entire business model.”

Right now, there has not been a critical mass, as enough emotionally-resonant crises have not (yet) taken place. If, or really, when this happens, action will occur. Helping craft sensible legislation through communication and transparency is a viable way to ensure we see regulation that integrates the needs of businesses and the rights of consumers.

THE SOLUTION TO TECHNOLOGICAL CONCERNS? TECHNOLOGY!

Even with the most well-intended and competently administered legislation, we must reluctantly concede that superior hackers can—and will—easily circumvent new restrictions. Understanding that any move to empower an ostensibly benevolent federal agency can—and will—result in consternation, we must ensure that the effort to control a small issue does not create a massive one.

One reasonable and equitable proposal could involve a concerted effort by the FTC to implement a public awareness campaign. Certainly a proactive endeavor from an “official” player might very well provide the not-so-gentle nudge certain companies require to share their business dealings a bit less begrudgingly. Naturally, if consumers and businesses meet in the middle and utilize autonomy and entrepreneurship it might equate to a much better case scenario. If we see more business models inspired to empower consumers, many of these potential roadblocks might be seamlessly bypassed.

One such start-up, San Francisco-based Bynamite, was recently profiled in The New York Times. “There should be an economic opportunity on the consumer side,” suggests Ginsu Yoon, the company’s co-founder. “Nearly all the investment and technology is (presently) on the advertising side.” Bynamite’s business model is both a commentary on the current landscape and a predictor of where it’s headed. That is, the mining of personal data is here to stay; there is simply too much money at stake to imagine otherwise. Yet the precepts of a (more) free-market arena enable—and insist upon—an exchange based on a monetized or incentivized quid pro quo. In a potentially paradigm-shifting twist, Bynamite is less focused on privacy protection and more interested in consumer choice and control.

In July the company launched software that users can download, which tracks what sites are collecting (from them). The software provides a cutting edge opportunity for consumers to see, and appreciate, in real time precisely what types of personal information they are essentially “swapping” every time they visit certain sites. “In a few years…a person’s profile of interests could be the basis for micropayment or discounts,” Yoon predicts. “A media company, for example, might charge a monthly subscription fee of $10 for news or entertainment programming, but offer it for $8 to those who exchanged their (portfolios).”

This business model seems to balance the current (and potentially future) poles of strictly—and federally—enforced privacy control and the unconstrained access companies presently enjoy. It is conceivable that a win/win scenario might unfold wherein consumers use the one-two punch of awareness and advocacy, while advertisers can increasingly fine-tune their targeted ads.

FIFTEEN MINUTES OR FOREVER: EVERYONE IS A CELEBRITY NOW (SORT OF)

Anytime you are talking about the future, it is irresponsible to express certainty, particularly when it relates to the ever-changing nature of technology. Nevertheless, it is quite evident that we will be seeing and hearing a great deal more about the delicate issue of privacy. In fact, the prediction here is that it will be a cover story in a major magazine within the next two years.

On a micro level, the conversation inexorably circles back to the basic, but occasionally contradictory notions of autonomy and access: we want quick and free content, but what are we willing to exchange for it? Perhaps more to the point, what should we be willing to exchange? The crux of the matter will increasingly be concerned with personal data susceptible to advanced algorithms and cookies that actually mine all manner of data that Internet users are mostly unaware of. The initial indifference is primarily due to lack of awareness: the only people likely to remain disinterested about potential implications are those to whom nothing has happened—yet.

On a macro level, this debate provides some fairly fascinating insights into how our social norms progress. Of course they are always in some state of transition (for better or worse, depending on whom you ask). The Internet, among many other things, has irrevocably altered the way we interact with the concept of celebrity. Instant and unending access has fed our collective appetite for information and intimacy; we “know” people in ways that were simply unimaginable less than ten years ago.

Now, along with the success and ubiquity of reality television, our culture has gone from worshipping to manufacturing celebrity. Recalling Andy Warhol’s infamous claim that “in the future, everyone will be famous for fifteen minutes”, the Internet in general and social networking in particular have ensured that some of us may have even more than fifteen minutes. No matter how banal of momentous, deliberate or unintended, these moments will all be preserved in the electronic ledger, potentially forever.

How we process and eventually regulate the exchange and deployment of this information will be a commentary on how we are able to exist—as employers, employees, parents, children, friends, acquaintances and enemies all with the data to contradict or redefine any of those public (and private) personas. The idea that people have different identities outside of work, whether they are teachers, executives or attorneys, will become more acceptable the more we collectively accept—and adapt to—a ceaselessly open window into the lives of others. The greater challenge is likely to remain how we reconcile the increasingly unfettered access those we know, and especially those we do not know, have into our own lives.